How can banks deliver genuine value through mobile banking?

Posted on September 27th, 2017

The growth of mobile banking has been a defining trend for the financial services industry in recent years. Consumers all over the world – in emerging and developed markets alike – have shown an increasing willingness to use handheld devices to manage their financial affairs.

Countries like India and Nigeria have recorded growth in the number of mobile banking users, while in the UK, consumer activity on banking apps has risen by 354 percent in the last five years, according to industry association BBA.

With customers becoming increasingly accustomed to the convenience of mobile banking, banks should be asking how they can leverage this channel to deliver maximum benefits to users.

Engaging and helping customers

The ongoing expansion of the mobile channel provides an unprecedented opportunity for financial services providers to engage with consumers and show how they can deliver genuinely valuable services.

In the recent ath Power Consumer Digital Banking Study, which surveyed some 3,000 retail banking customers, the majority (62 percent) of those who were current mobile banking users identified loyalty programs as an advanced feature that would interest them. Just over half (51 percent) said they would appreciate receiving discount coupons.

Speaking to Mobile Payments Today, Ed O’Brien, executive vice-president of research and strategy at ath Power Consulting, discussed the challenges that might come with offering these sorts of options. One is the ‘creepiness factor’ that could come with monitoring customer transactions in order to provide relevant rewards and offers. Mr O’Brien stressed the importance of giving consumers the ability to opt in or out.

There is also an onus on financial institutions to provide information and education, so people are fully aware of the services and advantages available to them.

“Banks need to educate consumers that they can help them,” said Mr O’Brien. “The idea [behind loyalty] would be to help them make more educated purchasing decisions.”

What’s next for mobile banking?

There’s no denying the huge potential of the mobile channel to transform retail banking, so where could it go from here?

According to the ath Power research, one area with big potential for growth is mobile account opening. Modern consumers are already well aware of the option to open an account without visiting a branch, with 51 percent of respondents to the survey having opened an account online. Nearly six out of ten (58 percent) had attempted to open multiple accounts.

It seems there is scope for these services to be streamlined, with 28 percent of people who had attempted to open an account online abandoning the process. Common reasons for this include the time required to complete the terms and conditions section (42 percent) and the overall complexity of online application (39 percent).

Mr O’Brien said mobile account opening may not be “an exact parallel” to a “killer feature” such as remote deposit, but there are strong similarities because “even if people say they don’t want online account opening, they want the capability to apply online, open and fund an account”.

There will be many exciting opportunities opening up in the mobile space with the launch of PSD2, the new EU legislation coming into effect in January 2018, which aims to level the playing field for competitors in financial services and open up more products and facilities for consumers. This could give rise to innovations such as mobile apps that let users manage all of their bank accounts at once or provide personalized product recommendations.

In short, there is huge potential for advancement and growth in the mobile channel, as long as providers show that they are capable of meeting expectations regarding security, usability and the overall customer experience.

Image credit: iStock/Rostislav_Sedlacek

Written by Dan Weis

Dan Weis works at NCR leading the retail banking mobile app team. The mobile apps are used by nearly 4.8 million consumers.